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4. Procurement and Strategic Sourcing

Strategic Sourcing

Issues and Opportunities in Procurement

In most companies externally purchased goods and services represent between 30% and 60% of revenue.

Few companies therefore fail to recognize the strategic value of a really sharp purchasing function. In addition, economic realities increasingly are forcing companies to make purchasing ever more cost efficient.

Most companies, however, do not have the time or resource to optimise this cost base. Companies are prevented from taking savings to the next level as they often lack data, have limited category expertise, and encounter stakeholder resistance. As a result companies leave money on the table. Savings in procurement are relatively risk-free, and generally have a much greater impact on profitability than headcount reduction.

For a company with a 10% profit margin where externally-sourced goods and services represent 50% of the cost base, a 10% reduction in this cost would lead to a 50% increase in profits - procurement is therefore THE greatest profit lever available to most companies, and the opportunities often remain untapped.

What R-e-volution offers

R-e-volution can help you to unlock the potential of your procurement function...turning it into a vehicle for significant profit improvements.

R-e-volution has two offerings to support companies in their quest to realise the maximum benefit from their external expenditure on goods and services. The one set of offerings focuses on providing companies with sourcing support, while the other focuses on sourcing consulting services where we work with client’s staff on a by-project basis to realise the benefits.

Sourcing Support Solutions

For companies that need to augment their sourcing capabilities and skill sets, R-e-volution Procurement Solutions offers custom solutions that leverage our expertise, experience, and global partnerships. We can provide research, customized technologies, training, and experienced resources to support specific needs and ensure that sourcing teams are well-equipped to meet their objectives.

Consulting Services

R-e-volution’s specialists work collaboratively with client staff to identify and implement cost reduction opportunities in the company’s third party spend. The first step in delivering the cost reduction is our proven Strategic Sourcing Opportunity Assessment Process. This step identifies and prioritises the full extent of the opportunities in external expenditure up front.

Once the Opportunity Assessment has been completed a rigorous, fact-based, and cross-functional strategic sourcing process is deployed. Attaining deep and sustainable cost reductions across business units or geographies is not an easy task…it requires excellent data, well thought-out sourcing strategies, powerful negotiations, and intensive stakeholder involvement. Our strategic process, and the expertise that sits behind it, is designed to deliver results that are measurable, implementable and sustainable. 

Our consultants are among the best and most experienced in the business and our methodologies and tools are tried and tested.

Our fee structure is highly attractive given our belief that clients hire us to deliver results, not recommendations only. Since we take great pride in our ability to realise tangible results and therefore guarantee our clients a significant return on their consulting investment we are willing to share the risks of savings delivery by linking a significant portion of our fees directly to the results achieved.